This looks at key areas as part of addressing tax fairness.

1. 2019 TAXATION –
REFORMING THE
TAX ACT AND
EXPANDING TAX
TREATIES
BY: PAUL YOUNG, CPA, CGA
SEPTEMBER 30, 2019

2. PAUL YOUNG - BIO
• CPA, CGA
• Financial Solutions
• SME – Risk Management
• SME – Emerging Technology
• SME – Business Process Change
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3. SUMMARY
• Tax havens cost the global economy billions - https://www.theguardian.com/global-development-professionals-
network/2016/may/10/were-losing-240bn-a-year-to-tax-avoidance-who-really-ends-up-paying
• Canada has joined other countries with the implementation of BEPS -
https://www.osler.com/en/resources/regulations/2018/canada-begins-ratification-process-for-multilateral-tax-
convention-to-implement-beps
• More needs to be done to shutdown trust funds held in tax havens. http://nationalpost.com/news/politics/stephen-
bronfman-lead-fundraiser-for-trudeau-in-2015-linked-to-offshore-tax-haven-paradise-papers
• CRA and Tax policies along tools are required to go after tax havens.
• Trudeau and Morneau seem to be too focus on small business tax grab than going after tax havens. Tax havens likely
cost the treasury about $8B to $10B per year.
• Government of Canada needs to complete a full review of the ITA to look at ways to streamline regulations
• Government of Canada needs to focus on improving business competitiveness in key areas like innovation and
productivity

4. AGENDA
• Offshore Tax Havens
• Offshore Tax Havens – Canada / GDP$
• Canada and Tax Havens
• OECD and Tax Havens (Corporation / BEPS)
• Tax Act (reforms)
• Taxation % of GDP
• Personal Income Taxation
• Per capital income / income classes
• Liberal Party of Canada and Competitiveness
• Taxation ranking
• Productivity
• Innovation
• Labor cost ranking
• 2019 Election / Party
• Technology Tax
• Business Ranking

5. OFFSHORE TAX
HAVENS
Source -
https://www.nextbigfuture.com/201
7/09/over-10-of-the-world-gdp-is-in-
offshore-bank-tax-
havens.html?utm_source=feedburner
&utm_medium=feed&utm_campaign
=Feed%3A+blogspot%2Fadvancednan
o+%28nextbigfuture%29

6. CANADA AND OFFSHORE TAX HAVENS
• Source - https://www.nextbigfuture.com/2017/09/over-10-of-the-world-gdp-is-in-offshore-bank-tax-havens.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2Fadvancednano+%28nextbigfuture%29 and Stats Canada
Offshore
Tax Havens
5%
Offshore
Tax Havens
$87B
GDP % GDP$
Estimated tax impact $6B to $8B
Liberals will tie up CRA doing small business
audits when the big money is with tax
havens

7. CANADA AND TAX HAVENS
Source - http://projects.thestar.com/panama-papers/canada-is-the-worlds-newest-tax-haven/
Toronto Star – January 25, 2017
Federal Finance Minister Bill
Morneau says his government sees
this as an important issue and that
he is working with his provincial
colleagues to bring greater
transparency to the corporate
registration system.
“We as a government, and I
personally, am committed to
making progress on ensuring
that we are not providing any
haven for any inappropriate
activities and that we’re
having companies and
individuals paying the share
of tax that should be due,” he
said in an interview.
Toronto Star – January 25, 2017

8. OECD AND TAX
HAVENS (BEPS)
Source -
http://www.taxjustice.net/2015/10/0
5/press-release-oecds-beps-
proposals-will-not-be-the-end-of-tax-
avoidance-by-multinationals/

9. OECD AND TAX
HAVENS
Source -
https://www.brookings.edu/blog/fut
ure-
development/2017/09/14/finding-
the-missing-linkages-in-your-tax-
base/

10. PARADISE PAPERS
Source - http://www.ctvnews.ca/business/cra-vows-action-on-canadian-tax-evaders-exposed-in-paradise-papers-
1.3664837?cid=sm%3Atrueanthem%3Actvnews%3Apost&utm_campaign=trueAnthem%3A+Trending+Content&utm_content=5a0040d819694a000705dd5e&utm_medium=trueAnthem&utm_source=facebook or
http://www.cbc.ca/news/business/paradise-papers-canadians-1.4386839
The Canada Revenue Agency says it won't hesitate to investigate new evidence of offshore
tax evasion in the wake of a second massive leak of tax haven financial records.
The leak of some 13.4 million records, dubbed the Paradise Papers, lifts another veil on the
often murky ways in which the wealthy - including more than 3,000 Canadian individuals and
entities - stash their money in offshore accounts to avoid paying taxes.
Among the names that pop up in the records with some connection to offshore accounts are
former Canadian prime ministers Brian Mulroney, Paul Martin and Jean Chretien, the Queen,
U.S. commerce secretary Wilbur Ross, and the past and current chief fundraisers for the
federal Liberal party.
CTV News – November 6, 2017

11. APPLEBY
Source - http://www.cbc.ca/news/business/paradise-papers-canadians-1.4386839 or https://www.thestar.com/news/paradise-
papers/2017/11/06/blue-chip-law-firm-appleby-had-strong-canadian-ties-leaked-documents-show.html
• If the liberals were so concerned about tax fairness then they would close down the ability to
offshore money to low tax jurisdiction through elaborate scheme of holding companies.
• CRA needs more manpower including tools to go after tax havens

12. CRA / TAX ACT
• Source -
https://www.cpacanada.ca/en/the
-cpa-profession/about-cpa-
canada/key-activities/public-
policy-government-
relations/policy-advocacy/cpa-
canada-tax-review-initiative

13. TAXATION % OF GDP
Source - https://www.theglobaleconomy.com/rankings/Tax_revenue/

14. PERSONAL INCOME TAXATION
People need to ask yourself who would be better for the middle class:
@justintrudeau who feels regressive taxation like carbon will help the middle class
@Andrewscheer who feels removing regressive taxation and focusing on lowering taxes for the middle
class (tax rates and tax credits).
https://www.slideshare.net/paulyoungcga/2019-election-middle-class-liberals-vs-cpc-july-2019 or
https://globalnews.ca/news/1356467/tax-cuts-since-2005-net-canadians-30b-pbo/
Areas to focus
• Re-visiting the non-refundable tax credits to include mat leave, transit, fitness, book and other tax credits
• Re-visiting the trust planning / taxes - https://wolterskluwer.ca/blog/strategic-use-trusts-tax-estate-planning/
• Re-visiting income splitting (family benefit)
• Re-visiting the working tax benefit
• Re-visiting capital gains and dividend tax rules
• Re-visiting seniors and care-giver tax credits
• Holding CPP to inflation
• EI should be spun into separate 3rd party agency. The money needs then to be re-visited i.e. surpluses.

15. GDP PER CAPITA
Source – Stats Canada
Assumptions
1. Based on GDP by sector
2. Based on annual growth rates
3. Based on GDP growth rates (no GDP availableafter 1997)
• Trudeau’s policies have not helped the middle class -
https://www.slideshare.net/paulyoungcga/2019-election-middle-class-liberals-vs-cpc-july-2019
• Trudeau’s policies have allowed the top 1% to pay less taxes -
https://www.slideshare.net/paulyoungcga/2019-election-wealtiest-top-1-canada-august-2019
• Trudeau’s poverty numbers are far from accurate. Poverty has been declining for years -
https://www.slideshare.net/paulyoungcga/2019-election-poverty-canada-july-2019

16. CONSERVATIVE PARTY OF CANADA VS LIBERAL PARTY OF CANADA – RANKING
GLOBALLY
Source - https://taxfoundation.org/corporate-
income-tax-rates-around-world-2016/ or
http://www.pwc.com/ca/en/media/release/canada-
ranks-2nd-among-g7-nations-ease-of-corporate-tax-
payment.html or
https://www.expertmarket.co.uk/focus/worlds-
most-productive-countries-2017 or
https://www.investinontario.com/spotlights/kearney
-reports-worlds-most-attractive-destinations-foreign-
direct-investment or
https://en.portal.santandertrade.com/establish-
overseas/canada/foreign-investment
Policy Area 2015 2017
Taxation 9th 17th
Productivity 18th 13th
Innovation 15th 18th
FDI 13th

17. TAXATION / RANKING
Source - https://taxfoundation.org/corporate-income-tax-rates-around-world-2016/ or http://www.pwc.com/ca/en/media/release/canada-ranks-2nd-among-g7-nations-ease-of-corporate-tax-payment.html
Canada fell in 2017 from 9 to 17. Liberal Party of Canada Took over in 2016.

18. RANKING / CANADA PRODUCTIVITY
Source - http://time.com/4621185/worker-productivity-countries/
Source -
https://www.forbes.com/sites/jackzenger/2013/0
1/17/the-3-forces-that-drive-improved-
productivity/#3ff2246239a8 or
http://blogs.worldbank.org/growth/what-drives-
productivity or
https://www.expertmarket.co.uk/focus/worlds-
most-productive-countries-2017
It is also called TFP (total
factor productivity) and
measured as a residual – the
difference between outputs
and a set of inputs (e.g. labor,
capital, and intermediate
goods, including energy, land
and buildings). Measurement
problems plague both inputs
(e.g. how do you account for
quality of labor or capital) and
outputs.

19. INNOVATION RANKING
• Source - http://www.wipo.int/pressroom/en/articles/2017/article_0006.html
• Canada has fallen 3 spots
in 2016 from 15 in 2015 to
18 in 2016
• Liberals ran a platform on
spending on innovation -
https://www.thestar.com/
news/canada/2017/03/12/
liberals-nearing-decision-
on-how-to-spend-800m-
earmarked-for-
innovation.html

20. LABOR RATES / TAX BURDEN
• Source - https://taxfoundation.org/comparison-tax-burden-labor-oecd-2016/

21. LABOR
COSTS

22. HYDRO COSTS / RANKING
• http://www.worldatlas.com/articles/electricity-rates-around-the-world.html
• BC, MB and PQ generate the bulk of
their power through Hydro
• Ontario is out there when it comes to
high rates across North America
• Liberal Government is pushing FIT at
the federal level via their carbon
taxation policies -
http://www.torontosun.com/2017/07/
20/canadian-youth-will-have-to-wait-
for-promised-green-jobs

23. REGULATORY BURDEN
Source - https://www.forbes.com/sites/kurtbadenhausen/2016/12/21/sweden-heads-the-
best-countries-for-business-for-2017/#1215046c7ecd

24. 2019 ELECTION / TAX POLICIES
Policy LPC CPC NDP
Transit Tax credit None $191 to $1,000
(defending the size
of the family
None
Universal Tax Credit None $850 for all groups
(low end tax
bracket reduced)
None
CPP Hikes Plan N/A N/A
Wealthiest Hike taxes to
wealthiest (led to
lower taxes paid by
the wealthiest
N/A Plans to hike taxes
on the wealthiest

25. TECHNOLOGY TAX
Source - https://www.financierworldwide.com/the-future-of-tax-technology#.XZHoR2Z7lPY
• The tax be approved by France looks very similar to a royalty tax

26. ECOMMERCE AND SALES
• eCommerce continues to expand as such changes to how consumption taxes should be applied needs
to be revisited - https://www.postandcourier.com/business/sc-hauls-in-m-in-online-sales-tax-
collections-after/article_6bc7f7d2-71d2-11e9-9e94-b777feb6881f.html (Nexus used to play a big part
when you need a fiscal presence in a location.

27. 2019 ELECTION
@JustinTrudeau only focus on tax reforms has been attacking small business. None of the Libs are discussing either the ITA
or shutting down tax havens. Trudeau policies have ensure the middle class is paying higher taxes -
https://www.slideshare.net/paulyoungcga/middle-class-are-you-better-off-in-2019-canada
@theJagmeetSingh constantly pushes higher taxes from the top 1%. The top 1% are already paying less taxes due to
Trudeau’s changes to taxation https://www.theglobeandmail.com/politics/article-high-income-earners-paid-46-billion-less-
in-taxes-in-2016-despite/
@andrewscheer is planning to bring back the transit tax credit as well as reduced the low-income bracket. Harper’s policies
led to more after tax money for Cdns - https://globalnews.ca/news/1356467/tax-cuts-since-2005-net-canadians-30b-pbo/
https://www.slideshare.net/paulyoungcga/2019-election-tax-reforms-and-fairness-canada-september-2019

28. WHAT NEEDS TO BE DONE
• Full review of Income Tax act as part of streamlining regulations and filings.
• CRA needs to adopt more tools to help with compliance, i.e. AI or Analytics
• It is also not always about taxation. Governments also need to get value out of tax collecting in terms of social programs -
https://www.slideshare.net/paulyoungcga/value-for-money-and-comprehensive-auditing-all-you-need-to-know
• CRA/Canada need to close down tax havens as well as expand tax treaties
• Government of Canada has to look at better ways to support businesses
• Refining the R&D Tax Credit System
• Review of payroll taxes (EI and CPP) - Tax increase should be tied to inflation. The government should look at other options for
pensions, like pooling funds or voluntary funding by employee and business
• Scrapping carbon taxation (there is no correlation between Carbon Tax and Emissions reduction)
• Revamping CCA rates, especially in manufacturing, mining and energy sector
• Eliminate direct subsidies
• Re-evaluation of how to tax trust funds.
• Resist moving consumption taxes up to high rates like Europe. The cost of living is very high Scandinavia countries that have high
consumption taxes
• Revamping how royalties and/or leases are handle for natural resources. There needs to be more encouragement to get goods out
of the ground to market.